Oman is considering the merger of eight state-run pension funds, a move which would boost efficiency and create a single multi-billion-dollar institution with increased investment power, the sultanate’s Minister for Financial Affairs said on Tuesday.
“The eight pension institutions are negotiating to merge which would lead to one large consolidated fund to improve efficiency, returns and investments,” Darwish al-Balushi told Reuters.
The funds set to be consolidated are the Civil Service Employees Pension Fund, Public Authority for Social Insurance, Royal Guard of Oman Pension Fund, Diwan of Royal Court Employees Pension Fund and four funds belonging to the security services.
The government does not disclose how much each fund is worth but each has extensive investments across the local stock market and in local real estate projects.
For example, the Ministry of Defence Pension Fund holds 7.66 per cent stake in National Bank of Oman and 6.6 per cent of Bank Muscat and the Civil Service Employees fund owns just over 10 percent of Bank Dhofar.
Officials from the pension funds were not available for comment.
The pension fund sector in the Gulf is nascent in comparison to those funds found in Western markets.
Its evolution is seen as a key development step going forward in a number of areas, such as in the development of a thriving local bond market – Gulf pension funds have stuck to equity investments, while Western funds are key buyers of bonds.
Oman has a population of nearly three million people, of which around two million are Omani.